The importance of asset allocation as well as non-investment considerations

  • Gift annuity reserves can be invested in a variety of different manners based on the specific needs of the organization
  • The setting of an investment policy should start with an understanding of the basics of a gift annuity
  • There are also many non-investment variables that must be taken into account when managing gift annuity assets

When considering the management of charitable gift annuity (CGA) reserves, there are several considerations that must be made.  While on its surface, the question of how to manage the CGA assets would seem to be remarkably easy and one of pure asset allocation.  The New York State Insurance Department, for example, applies the Prudent Investor Standard to gift annuity reserves. There are however, many non-investment variables that must be taken into account when managing gift annuity assets.  The complexity of non-investment issues vary from the relatively straightforward,  such as social screening, to the more complex issues such as beneficiary concentration with a donor who has extended life expectancy and whose residuum is designated to fund a special project at a specified dollar threshold.

Please see important disclosures at the end of the article.

Contact an Expert